Brave Bison LON:BBSN is an ambitious AIM-listed, London-based digital advertising and technology services agency. It has been trying to speedily increase its market share by acquiring smaller and comparably-sized marketing agencies.
It had targeted the Mission Group LON:TMG, an AIM-listed competitor in June this year, initially bidding GBP27m for its rival. The bid was then upped to GBP32.3m in an all-share offer, then ultimately withdrawn as its target thought Brave Bison was undervaluing their company.
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Unperturbed, Brave Bison’s management scouted around for alternative targets and today (9th December) announced that it had agreed to acquire Engage Digital Partners, a privately-owned, London-based global sports marketing company with offices in India, the UAE and Australia for GBP10.6m. Brave Bison will upfront an initial GBP2.1m, and offer equity consideration of GBP2m with a further GBP6.5m due over three-years, subject to performance conditions.
Complementary client lists
Engage Digital has footprints in Formula One, the International Cricketing Council (ICC), leading Spanish football-club, Real Madrid and the All Blacks, New Zealand’s Rugby Team. The acquisition fits in nicely with Brave Bison’s existing client portfolio, which includes golf’s PGA Tour and Ryder Cup, tennis’ US Open and Australian Open, the Caribbean’s 20:20 cricket tournament CPLT20, and motor racing’s 24-hour Le Mans endurance race.
Engage seems quite happy with the deal. They claim it creates: “[…] the UK’s largest independent sports marketing agency”, that, “[will] create an enlarged sports and entertainment division for Brave Bison that will service some of the biggest federations across football, cricket, rugby, motorsports, tennis, golf and e-sports and total GBP16m in pro-forma turnover.”
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Brave Bison is also feeling merry. Oliver Green, executive chairman of Brave Bison, says: “Engage boast an enviable client roster including Formula One, ICC and Real Madrid, and deep expertise in sports media and digital content strategy. This combination comes at a time when rights holders and sports federations are looking to maximise their IP, boost fan engagement and really drive commercial performance using a more data driven approach. We look forward to working with [the] Engage team.”
According to the marketing, Engage uses a combination of proprietary technology, digital strategy and content creation to help sports federations and rights holders drive better engagement from their fans and take a more personalised approach to building audiences, driving ticket sales and striking more lucrative commercial partnerships.
Earnings-accretive acquisition over medium-term
Brave Bison said: “In the twelve-months ending 31st December 2024, Engage is expected to generate GBP6.9m of turnover and an adjusted EBITDA loss of GBP300,000. Following a restructuring and integration programme, Engage is expected to be earnings-accretive for Brave Bison over the medium-term.” The acquisition, which is expected to complete in early January 2025, will be funded by Brave Bison’s cash resources.
Management also updated the market on its trading outlook, which it said is in-line with market expectations of adjusted earnings of GBP3.6m for FY24, and post-acquisition Brave Bison will still have GBP7m in the bank by the end of the financial year.
In its half-year report to end-June, Brave Bison reported a small increase in net revenue by 1% to GBP10.1m, when comparing 1H24 with 1H23, and a year-on-year 20% increase in adjusted profit-before-tax to GBP1.8m for 1H24.
Brave Bison growth strategy
Brave Bison’s share opened the week (9th December) at 2.284p, up 21.8% over one-year, but down 5.8% over six-months. The company has a market cap of GBP28.1m.
Brave Bison’s acquisition of Engage Digital is a strategic move that aligns with its growth strategy and strengthens its position in the sports marketing industry. While the company faces challenges in the near term, its long-term prospects appear promising, particularly as it leverages technology and data-driven approaches to enhance fan engagement and drive revenue for its clients.
